Senator Joni Ernst has called on 22 federal agencies to halt all future sole-source awards under the Small Business Administration's (SBA) 8(a) program. In letters sent to each agency, Ernst expressed concerns about potentially fraudulent contract awards and contracts made to ineligible firms. She requested a full review of the program before any new awards are issued.
"While there’s no doubt that the Biden administration’s indifference toward 8(a) program integrity enabled swindlers and fraudsters to treat federal contracting programs like personal piggy banks, 8(a) program flaws have raised alarm bells for decades. The SBA’s 8(a) program is the largest set-aside program at the agency, which dished out $25+ billion in contract awards during fiscal year 2024 (FY 24) alone. Yet decades of Government Accountability Office (GAO), SBA’s Office of Inspector General, and DOJ probes expose the same rot," wrote Ernst.
The call for action follows several recent investigations into misuse of the 8(a) program. In June, the Department of Justice reported that four individuals, including a government contracting officer from USAID, pleaded guilty to using the program in a bribery scheme worth $550 million over several decades.
Last month, an undercover interview revealed allegations of another large-scale fraud involving ATI Government Solutions. A representative from the company reportedly described how they claimed Native American ownership to qualify for 8(a) status, then won contracts based on this minority status while subcontracting out the work and keeping a significant portion of the funds.
Following these incidents, Senator Ernst called for a comprehensive review of the 8(a) program. She also introduced legislation titled "Stop 8(a) Contracting Fraud Act," which would pause all new no-bid awards until an audit is completed.
